Full Feasibility Analysis

From Preparing Effective Business Plans by Bruce R. Barringer

Note: All fields can be expanded to provide additional space to respond to the questions. A
copy of this template, along with each of the assessment tools, is also available in
PDF format at the authors Web site at www.prenhall.com/entrepreneurship.

Introduction
A.

Name of the proposed business : Nature cafe 24 hours

B.

Name of the founder (or founders) : Yu-jou Lee (Lowh)

C.

One paragraph summary of the business : Our business is 24 hours caf shop
along with nature theme for serving people who like to work at night and people
who like to work outside because they can be more focusing. We using nature as
a theme because we want our customers to be relax while working at the same
time. The business will earn money by charging services from customers;
however, we provide some snacks,beverages, and free wifi for our clients for
free. Moreover, we have print,scan, and photo copy services that will cost money.

Part 1: Product/Service Feasibility

Issues Addressed in This Part
A.

Product/service desirability

B.

Product/service demand

Assessment Tools
Concept Statement Test

Write a concept statement for your product/service idea. Show the concept statement
to 5 to 10 people. Select people who will give you informed and candid feedback.
Attached a blank sheet to the concept statement, and ask the people who read the
statement to (1) tell you three things they like about your product/service idea, (2)
provide three suggestions for making it better, (3) tell you whether they think the
product or service idea is feasible (or will be successful), and (4) share any additional
comments or suggestions.
Summarize the information you obtain from the concept statement into the following
three categories:
*

Strengths of the product or service ideathings people who evaluated your

product or service concept said they liked about the idea

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Suggestions for strengthening the ideasuggestions made by people for

strengthening or improving the idea

Overall feasibility of the product or service conceptreport the number of

people who thing the idea is feasible, the number of people who think it isnt
feasible, and any additional comments that were made

Other comments and suggestions

Buying Intentions Survey

Distribute the concept statement to 15 to 30 prospective customers (do not include
any of the people who completed the concept statement test) with the following
buying intentions survey attached. Ask each participant to read the concept statement
and complete the buying intentions survey. Record the number of people who
participated in the survey and the results of the survey here.

Along with the raw data recorded here, report the percentage of the total number of
people you surveyed that said they would probably buy or definitely would buy your
product or service if offered. This percentage is the most important figure in gauging
potential customer interest.

One caveat is that people who say that they intend to purchase a product do
not always follow through, so the numbers resulting from this activity are almost
always optimistic. Still, the numbers provide you with a preliminary indication of
how your most likely customers will respond to your potential product or service
offering.

How likely would you be to buy the product or service described above?
___1___ Definitely would buy
___6___ Probably would buy
___5___ Might or might not buy
___0___ Probably would not buy
___0___ Definitely would not buy
Additional questions may be added to the buying intentions survey.
Conclusion (expand fields and report findings, in discussion form, for each area)
A.

Product/service desirability : Most of office workers and students in Thailand

dont have a specific time of working, so 24 hours caf shop are one choices for
them.

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B.

Product/service demand : Most of MUIDSs students are interested in this

business. 1 person : Definitely would buy, 6 people : Probably would buy, and 5
people might or might not buy.

C.

Product/service feasibility (circle the correct response)

Not Feasible
Unsure

D.

Feasible

Suggestions for improving product/service feasibility. : Have more services that

customer needs like printer, scanner, and photocopying machine

Part 2: Industry/Market Feasibility

Issues Addressed in This Part
A.

Industry attractiveness

B.

Target market attractiveness

C.

Timeliness of entry into the target market

Assessment Tools
Industry Attractiveness
To the extent possible, assess the industry at the five-digit NAICS code level your
potential business will be entering. Use a broader industry category (less NCICS
digits) if appropriate (http://www.census.gov/epcd/www/naicstab.htm).
Assess the attractiveness of the industry the potential business plans to enter on each
of the following dimensions.

Industry Attractiveness Assessment Tool

(used to assess the broad industry, rather than the specific target market, you plan
to enter)
Low Potential

Moderate Potential

High Potential

1.

Number of competitors

Many

Few (8)

None

2.

Age of industry

Old

Middle aged

Young

3.

Growth rate of industry

Little or no
growth

Moderate growth

Strong growth

4.

Average net income for

firms in the industry

Low

Medium

High

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5.

Degree of industry
concentration

Concentrated

Neither
concentrated nor
fragmented

Fragmented

6.

Stage of industry life

cycle

Maturity
phase or
decline phase

Growth phase

Emergence
phase

7.

Importance of industrys
products and/or services
to customers

Ambivalent

Would like to
have

Must have

8.

Extent to which business Low

and environmental trends
are moving in favor of
the industry

Medium

High

9.

Number of exciting new

product and services
emerging from the
industry

Low

Medium

High

10.

Long-term prospects

Weak

Neutral

Strong

Target Market Attractiveness

Identify the portion or specific market within your broader industry that you plan to
target.
Assess the attractiveness of the target market on each of the following dimensions.
Target Market Attractiveness Assessment Tool
(used to assess the specific target market, rather than the broader industry, you plan
to enter)
Low Potential

Moderate Potential

High Potential

1.

Number of competitors
in target market

Many

Few

None

2.

Growth rate of firms in

the target market

Little to no
growth

Slow growth

Rapid growth

3.

Average net income for

Low
firms in the target market

Medium

High

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Low Potential

Moderate Potential

High Potential

4.

Methods for generating

revenue in the industry

Unclear

Somewhat clear

Clear

5.

Ability to create barriers

to entry for potential
competitors

Unable to
create

May or may not be

able to create

Can create

6.

Degree to which
Satisfied
customers feel satisfied by
the current offerings in the
target market

Neither satisfied or
dissatisfied

Unsatisfied

7.

Potential to employ low

Low
cost guerrilla and/or buzz
marketing techniques to
promote the firms product
or services

Moderate

High

8.

Excitement surrounding
new product/service
offerings in the target
market

Medium

High

Low

Market Timeliness
Determine the extent to which the window of opportunity for the proposed business
is open or closed based on the following criteria.
Determine the timeliness of entering a specific target market based on other criteria.
Market Timeliness Assessment Tool
Low Potential

Moderate Potential High Potential

Customers are
not in a buying
mood

Customers are in a
moderate buying
mood

1.

Buying mood of
customers

2.

Momentum of the market Stable to losing Slowly gaining

momentum
momentum

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Customers are
in an
aggressive
buying mood
Rapidly
gaining
momentum

3.

Need for a new firm in

the market with your
offerings or geographic
location

4.

5.

Low

Moderate

High

Extent to which business Low

and environmental trends
are moving in favor of
the target market

Medium

High

Recent or planned
entrance of large firms
into the market

Rumors that large

firms may be
entering the
market

No larger firms
entered the
market or are
rumored to be
entering the
market

Large firms
entering the
market

Conclusion (expand fields and report findings, in discussion form, for each area)
A.

Industry attractiveness : The business is attractive because there are less

competitors, but in the trend also this was fit to customers demand.

B.

Target market attractiveness : The business market is to target on students and

office workers. Moreover, our business idea quite match to their needs.

C.

Market timeliness : It was a perfect time to entire into this market because of the
trend and customers needs, and now the market trends are growing up rapidly.

D.

Industry/market feasibility (circle the correct response)

Not Feasible
Unsure

E.

Feasible

Suggestions for improving industry/market feasibility. : The business can gain

more profit by having more branches for serving different kinds of customers.
Maybe we can expand our target customers not just students and office workers.

Part 3: Organizational Feasibility

Issues Addressed in This Part
A.

Management prowess

B.

Resource sufficiency

Assessment Tools
Management Prowess
Use the following table to candidly and objectively rate the prowess of the founder
or group of founders who will be starting the proposed venture.

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Management Prowess Assessment Tool

Low Potential

Moderate Potential

High Potential

1.

Passion for the business

idea

Low

Moderate

High

2.

Relevant industry
experience

None

Moderate

Extensive

3.

Prior entrepreneurial
experience

None

Moderate

Extensive

4.

Depth of professional
and social networks

Weak

Moderate

Strong

5.

Creativity among
management team
members

Low

Moderate

High

6.

Experience and expertise None

in cash flow
management

Moderate

High

7.

College graduate

Some college
education but not
currently in college

Graduated or
are currently in
college

No college
education

Resource Sufficiency
The focus in this section is on non financial resources. Use the following table to rate
your resource sufficiency in each category.
The list of resources is not meant to be exhaustive. A list of the 6 to 12 most critical
non financial resources for your proposed business is sufficient.
An explanation of the rating system used in the first portion of the table is as follows:
1

Available

Likely to be available: will probably be available and will be within my budget

Unlikely to be available: will probably be hard to find or gain access to, and
may exceed my budget

Unavailable

NA: not applicable for my business

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Resource Sufficiency Assessment Tool

Ratings

Resource Sufficiency

Office space

Lab space, manufacturing space, or space to launch a

service business

Contract manufacturers or outsource providers

Key management employees (now and in the future)

Key support personnel (now and in the future)

Key equipment needed to operate the business

(computers, machinery, delivery vehicles)

Ability to obtain intellectual property protection on key

aspects of the business

Support of local and state government if applicable for

business launch

Ability to form favorable business partnerships

Ratings: Strong, Neutral,

or Weak
Weak

Proximity to similar firms (for the purpose of knowledge

sharing)

Strong

Proximity to suppliers

Neutral

Proximity to customers

Strong

Proximity to a major research university (if applicable)

Conclusion (expand fields and report findings, in discussion form, for each area)
A.

Management prowess : This business still dont have a fix financial management,
so we still have to search and think new idea for promoting and managing.
Maybe we can take this opportunities to learn more experience from our
suppliers and customers.

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B.

Resource sufficiency : Most of the land is already available near college , but we
still have to spend money on building and to spread to different areas.

C.

Organizational feasibility (circle the correct response)

Not Feasible
Unsure

D.

Feasible

Suggestions for improving organizational feasibility : Maybe we can find more

land near public transports or heart of the city like Siam area.

Part 4: Financial Feasibility

Issues Addressed in This Part
A.

Total startup cash needed

B.

Financial performance of similar businesses

C.

Overall financial attractiveness of the proposed venture

Assessment Tools
Total Start-Up Cash Needed
The startup costs (which include capital investments and operating expenses) should
include all the costs necessary for the business to make its first sale. New firms
typically need money for a host of purposes, including the hiring of personnel, office
or manufacturing space, equipment, training, research and development, marketing,
and the initial product rollout.
At the feasibility analysis stage, it is not necessary for the number to be exact.
However, the number should be fairly accurate to give an entrepreneur an idea of the
dollar amount that will be needed to launch the firm. After the approximate dollar
amount is known, the entrepreneur should determine specifically where the money
will come from to cover the startup costs.
The total startup cash needed can be estimate using the following table.
Total Startup Cash Needed (to Make First Sale)
Capital Investments

Property

Amount

4,000,000

Furniture and fixtures

500,000

Computer equipment

85,000

Other equipment

300,000

Vehicles

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Operating Expenses

Amount

Legal, accounting, and professional services

25,000

Advertising and promotions

5,000

Deposits for utilities

15,000

Licenses and permits

3,000
100,000

Prepaid insurance
Lease payments

Salary and wages

120,000
5,000

Payroll taxes
Travel

Signs

3,000

Tools and supplies

10,000

Starting inventory

40,000
1,000,000

Cash (working capital)

Other expense 1

Other expense 2

6,211,000

Total Startup Cash Needed =

Comparison of the Financial Performance of Proposed Venture to Similar Firms

Use the following tables to compare the proposed new venture to similar firms in
regard to annual sales (Year 1 and Year 2) and profitability (Year 1 and Year 2).
Comparison of the Financial Performance of Proposed Venture to Similar Firms
Assessment Tool
Annual Sales
Estimate of Proposed Ventures
Annual SalesYear 1

Explanation of How the Estimate

Was Computed

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Estimate of Year 1 Sales ____4,608,000___

Drink = 160, 50 pieces/day

Summary: How proposed annual sales, on

average, compares to similar firms (circle one)

Cake = 120, 40pieces/day

Below Average

Average

Above Average

= 384,000/month
=4,608,000/year

Estimate of Year 2 Sales ____9,216,000_____

Drink = 160, 100 pieces/day

Summary: How proposed annual sales, on

average, compares to similar firms (circle one)

Cake = 120, 80pieces/day

Below Average

Average

Above Average

= 768,000/month
=9,216,000/year

Net Income
Estimate of Proposed Ventures
Net IncomeYear 1

Explanation of How the Estimate

was Computed

Estimate of Year 1 Net Income

_____-1,603,000_____

4,608,000 - 6,211,000

Summary: How proposed net income, on

average, compares to similar firms (circle one)
Below Average

Average

Above Average
9,216,000 - 283,000

Estimate of Year 2 Net Income

_____8,933,000_____
Summary: How proposed net income, on
average, compares to similar firms (circle one)
Below Average

Average

= -1,603,000

= 8,933,000

Above Average

Overall Financial Attractiveness of the Proposed Venture

The following factors are important in regard to the overall financial attractiveness of
the proposed business.
Assess the strength of each factor in the following table.
Overall Financial Attractiveness of Proposed Venture Assessment Tool
Low Potential

Moderate Potential

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High
Potential

1.

Steady and rapid growth in Unlikely

sales during the first one to
three years in a clearly
defined target market

Moderately likely

Highly likely

2.

High percentage of
Low
recurring income
meaning that once you win
a client, the client will
provide recurring sources
of revenue

Moderate

Strong

3.

Ability to forecast income

and expenses with a
reasonable degree of
certainty

Weak

Moderate

Strong

4.

Likelihood that internally

generated funds will be
available within two years
to finance growth

Unlikely

Moderately likely

Highly likely

5.

Availability of exit
opportunity for investor if
applicable

Unlikely to be
unavailable

May be available

Likely to be
available

Conclusion (report finding for each area)

A.

Total startup cash needed : Land (4,000,000), Furniture (500,000), Equipments

(385,000), Tools and supplies (10,000), Inventory (40,000), Cash
(1,000,000)

B.

Financial performance of similar businesses : The similar business can sell up

C.

Financial feasibility (circle the correct response)

Not Feasible
Unsure

D.

Feasible

Suggestions for improving financial feasibility : Reduce some needless expenses.

Overall Feasibility: Summary and Conclusion

Overall Feasibility of the
Business Idea Based on
Each Part

Suggestions for Improving

the Feasibility

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Product/Market Feasibility

Not feasible
Unsure
Feasible

More services for serving

customers like printing,
scanning, and copying
services.

Industry/Market Feasibility

Not feasible
Unsure
Feasible

More branches for serving

different target customers.

Organizational Feasibility

Not feasible
Unsure
Feasible

More lands that located

near the public transports
stations for easy to travel.

Financial Feasibility

Not feasible
Unsure
Feasible

Reduce some unnecessary

expenses like furniture.
Maybe we can adjust this
in the future.

Overall Assessment

Not feasible
Unsure
Feasible

Expand more branches in

different areas, and have
the services that other
stores dont serve to their
customers.

Conclusionbriefly summarize your justification for your overall assessment.

Our business named Nature cafe 24 hours. Our target of customers dont have any
specific times of works, so this will be fit to their needs. Furthermore, in theses days this
type of business are newly in trend. To conclude our overall business are feasibility.
Therefore, there are high chances that our business will become successful in the future.

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